Mo. warns renters seeking tax credit that to qualify their landlords must pay property taxes

Landlords must pay taxes for renters to get credit

COLUMBIA, Mo. — Missouri tax officials are warning people who live in rented housing that they do not qualify for a tax break unless their landlords pay property taxes.

Low-income disabled people and senior citizens are entitled to a property tax credit on their state tax returns of up to $750 for renters and $1,100 for those who own their homes. The amount of the tax credit depends on the real estate taxes paid or rent paid and total household income. The Missouri Revenue Department says that tax credit requires that renters’ landlords pay property taxes.

That means, for example, that renters living in public housing do not qualify for the tax credit.

The Columbia Daily Tribune reported Monday that state tax officials say there now is greater recognition that the law requires landlords to pay property taxes for renters to get the tax break.

Brenda Procter, a personal finance specialist at the University of Missouri, said the eligibility interpretation for earning the tax credit is new. Procter said it could leave thousands of low-income and disabled people living in tax-exempt housing without money that they have relied upon in the past.

“The news of the change came as a shock to many,” she said. “There needs to be some kind of stopgap solution this year to ease the transition for low-income and elderly people who have been blindsided by this new interpretation of the law.”

But Revenue Department spokesman Ted Farnen said nothing has changed. He said that in 2009, the department processed 260,130 applications for the tax credit and issued refunds in 219,711 cases.

“It’s always been the law,” Farnen said. “It’s fair to say more people who are helping prepare tax forms and some of the people applying for the credit have greater recognition that this has always been the law.”

Information from: Columbia Daily Tribune, www.columbiatribune.com